Telephone Federal Universal Service Fee Tax Law and Legal Definition

Since May of 1997, the Federal Communications Commission (FCC) requires
telecommunications carriers to pay into the Universal Service Fund. This
helps provide affordable phone service and gives schools, libraries, and
rural healthcare providers access to the Internet. Telecommunications carriers
are required by the FCC, to pay a percentage of their revenues for state-to-state
and international services into the Universal Service Fund. The FCC sets
this percentage on a quarterly basis. Some phone companies have chosen
to recover its payments into the Universal Service Fund by charging customers
the UCC, which is now equal to the percentage set by the FCC.

The Universal Service Fund helps provide affordable telecommunications
services for low-income customers and customers in rural areas. It also
provides discounts on Internet access for eligible schools, libraries and
rural health care providers. The USF is collected from telecommunications
carriers and administered by the Universal Service Administration Corporation.
They are responsible for disbursing the funds according to eligibility
criteria established by the FCC. The phone company may recover its costs
for the required payments into this fund through a separate charge on each
residential customer's bill. This charge is sometimes called the Universal
Connectivity Charge.